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GlyEco Reports First Quarter 2018 Results

Total Revenues Increased 31% for the QuarterGross Margins Improved from 6% to 18% for the Quarter

ROCK HILL, SC / ACCESSWIRE / May 15, 2018 / GlyEco, Inc. (''GlyEco'' or the ''Company'') (OTC PINK: GLYE), a developer, manufacturer and distributor of performance fluids for the automotive, commercial and industrial markets, announced today the following financial results for the quarter ended March 31, 2018:

Quarter ended March 31,

2018

2017

Sales, net

$

3,001,000

$

2,290,000

Gross profit

$

552,000

$

140,000

Total operating expenses

$

1,643,000

$

1,052,000

Loss from operations

$

(1,091,000)

$

(912,000)

Net loss

$

(1,218,000)

$

(1,109,000)

Adjusted EBITDA

$

(695,000)

$

(529,000)

First Quarter of 2018 Highlights

Total Revenues increased by $711,000 or 31%, from $2,290,000 for the quarter ended March 31, 2017 to $3,001,000 for the quarter ended March 31, 2018.

Consumer Revenues increased by $141,000 or 9%, from $1,599,000 for quarter ended March 31, 2017 to $1,740,000 for the quarter ended March 31, 2018.

Industrial Revenues increased $667,000 or 71%, from $941,000 for the quarter ended March 31, 2017 to $1,608,000 for the quarter ended March 31, 2018.

Total Gross Profit increased from $140,000, representing a 6% gross margin, for the quarter ended March 31, 2017 to $552,000, representing a 18% gross margin, for the quarter ended March 31, 2018.

Consumer Gross Profit decreased from $192,000, representing a 12% gross margin, for the quarter ended March 31, 2017 to $170,000, representing a 10% gross margin, for the quarter ended March 31, 2018.

Industrial Gross Profit increased from a negative $(52,000), representing a negative (6)% gross margin, for the quarter ended March 31, 2017 to $382,000, representing a 24% gross margin, for the quarter ended March 31, 2018.

Operating expenses increased from $1,052,000, representing a 46% operating expense ratio for the quarter ended March 31, 2017, to $1,643,000, representing a 55% expense ratio for the quarter ended March 31, 2018. On a sequential basis compared to the quarter ended December 31, 2017, operating expenses increased $49,000 or 3%.

Adjusted EBITDA decreased by $166,000, from $(529,000) for the quarter ended March 31, 2017 to $(695,000) for the quarter ended March 31, 2018.

First Quarter of 2018 Financial Review

The Company reported total revenues increased by $711,000 or 31%, from $2,290,000 for the quarter ended March 31, 2017 to $3,001,000 for the quarter ended March 31, 2018. Consumer revenues increased by $141,000 or 9%, from $1,599,000 for quarter ended March 31, 2017 to $1,740,000 for the quarter ended March 31, 2018. To position the Company for long term success and reach our positive adjusted EBITDA goal in 2018, we focused on operational improvements and consistency during the quarter and deemphasized sales growth. We believe we have a robust pipeline of sales opportunities that we will focus on over the remainder of 2018, while continuing to raise the bar in operations. Industrial revenues increased $667,000 or 71%, from $941,000 for the quarter ended March 31, 2017 to $1,608,000 for the quarter ended March 31, 2018. Sales growth was significant on a year over year basis. However, compared to our expectations and the sequential quarter ended December 31, 2017, sales were down as a result of a shortfall in feedstock received during the quarter from a key supplier. This feedstock supply, which is subject to a written contract, has resumed and the supplier is also working to make up for the current quarter shortfall over the remainder of 2018.

The Company reported total gross profit increased from $140,000, representing a 6% gross margin, for the quarter ended March 31, 2017 to $552,000, representing a 18% gross margin, for the quarter ended March 31, 2018. Consumer gross profit decreased from $192,000, representing a 12% gross margin, for the quarter ended March 31, 2017 to $170,000, representing a 10% gross margin, for the quarter ended March 31, 2018. The gross profit was primarily impacted by production issues across our facilities, which resulted in a 20% decline in production. These issues have since been corrected and production has been running at or near capacity on a regular basis since mid-March. Industrial gross profit increased from a negative $(52,000), representing a negative (6)% gross margin, for the quarter ended March 31, 2017 to $382,000, representing a 24% gross margin, for the quarter ended March 31, 2018. Gross profit for the quarter ended March 31, 2017 was negatively impacted by approximately $200,000 of production costs that were not fully absorbed into inventory, but rather expensed while the newly acquired facility in Institute, West Virginia was off-line during the first 2 months of the quarter for infrastructure related capital improvements.

The Company reported operating expenses increased from $1,052,000, representing a 46% operating expense ratio for the quarter ended March 31, 2017, to $1,643,000, representing a 55% expense ratio for the quarter ended March 31, 2018. On a sequential basis compared to the quarter ended December 31, 2017, operating expenses increased $49,000 or 3%. We estimate that about $300,000 of the $519,000 of incremental expenses, including wages and benefits and legal and professional, are not reflective of our expected quarterly operating expense run rate for the second half of 2018. As such, we expect that operating expenses will decline incrementally over the next few quarters during 2018 as significant non-recurring projects are completed and we continue to refine our operations, including actions taken during and after the first quarter of 2018 in areas such as staff reductions and changes in responsibilities.

The Company reported an operating loss of $1,091,000 for the quarter ended March 31, 2018, compared to a $912,000 operating loss for the quarter ended March 31, 2017.

The Company reported a net loss of $1,218,000 for the quarter ended March 31, 2018, compared to a net loss of $1,109,000 for the quarter ended March 31, 2017.

The Company reported adjusted EBITDA of $(695,000) for the quarter ended March 31, 2018, compared to $(529,000) for the quarter ended March 31, 2017.

''In the first quarter, we made progress towards reaching quarterly positive adjusted EBITDA in the second half of 2018 and building a long term viable business with improving financial performance in several key areas as well as raising our standards for operational performance and executing day in and day out. Our focus on fundamental operating practices, increasing accountability across our businesses, and improved decision making are yielding results,'' said Ian Rhodes, President and Chief Executive Officer. ''We expect to see a continuation of these positive trends in the business throughout the remainder of the year and, as a result, we remain confident in our updated full-year Revenue and quarterly Adjusted EBITDA guidance.''

Business Outlook and 2018 Guidance

The Company recently completed the private placement of $2.1 million, 13-month notes that bear interest at 10% and include warrant coverage at 25% with a three-year term and $0.05 exercise price.

The Company confirmed that the previously announced antifreeze blending project at its facility in Institute, WV remains on schedule and is expected to be complete and operational before the end of the second quarter of 2018.

As previously announced, effective April 27th, the Company appointed Richard Geib to the new role of Chief Operating Officer. Geib will report to President and CEO Ian Rhodes. The Company also announced, that effective April 27th, it named Michael Olsson as Executive Vice President - Consumer Segment and Dennis Kelly as Executive Vice President - Industrial Segment. Olsson and Kelly will report to Geib.

The Company estimates that the U.S. antifreeze/coolant market, the Company's current primary market, represents more than $2 billion in annual sales. With a current market share of less than 1%, the Company believes there is a significant opportunity for profitability and growth.

Over the past 18 months, the entire GlyEco Team has invested significant time and energy into building a company that is much better positioned to benefit all of our stakeholders, including, shareholders, customers, vendors, employees and our communities. We believe the Company is positioned with the right people, equipment and know how to reach profitability in the near term (6 to 12 months) and drive significant profitable growth over the short term (1-3 years) and medium term (3-5 years). Through a combination of improved operational execution, cost management and revenue growth we are focused on reaching positive quarterly adjusted EBITDA in the second half of 2018, which we believe is an obtainable goal.

The Company updates its previously provided guidance for full year 2018:

Net Revenues for 2018 is expected to be at the high end of the previously provided guidance of $14.0 million and $16.0 million.

Quarterly adjusted EBITDA is expected to be positive in the second half of 2018.

About GlyEco, Inc.

GlyEco is a developer, manufacturer and distributor of performance fluids for the automotive, commercial and industrial markets. We specialize in coolants, additives and complementary fluids. We believe our vertically integrated approach, which includes formulating products, acquiring feedstock, managing facility construction and upgrades, operating facilities, and distributing products through our fleet of trucks, positions us to serve our key markets and enables us to capture incremental revenue and margin throughout the process. Our network of facilities, develop, manufacture and distribute high quality products that meet or exceed industry quality standards, including a wide spectrum of ready to use antifreezes and additive packages for the antifreeze/coolant, gas patch coolants and heat transfer fluid industries, throughout North America.

To assist investors and other interested parties in staying informed about GlyEco, the Company distributes, by e-mail, press releases and other information. To be added to the Company distribution list, please contact us at info@glyeco.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as ''believe,'' ''expect,'' ''anticipate,'' ''plan,'' ''potential,'' ''continue,'' or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company's control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as required by federal securities laws.

Preferred stock; 40,000,000 shares authorized; $0.0001 par value; no shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively

-

-

Common stock, 300,000,000 shares authorized; $0.0001 par value; 166,593,661 and 165,288,061 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively

16,659

16,529

Additional paid-in capital

46,133,997

45,847,572

Accumulated deficit

(43,214,170)

(41,996,598)

Total stockholders' equity

2,936,486

3,867,503

Total liabilities and stockholders' equity

$

13,050,109

$

13,013,034

GLYECO, INC. AND SUBSIDIARIESCondensed Consolidated Statements of OperationsFor the three months ended March 31, 2018 and 2017

Three months ended March 31,

2018

2017

(unaudited)

(unaudited)

Sales, net

$

3,001,010

$

2,290,321

Cost of goods sold

2,449,100

2,150,586

Gross profit

551,910

139,735

Operating expenses:

Consulting fees

48,591

53,426

Share-based compensation

119,888

136,986

Salaries and wages

662,231

343,055

Legal and professional

330,439

160,991

General and administrative

482,032

357,213

Total operating expenses

1,643,181

1,051,671

Loss from operations

(1,091,271)

(911,936)

Other expense:

Interest expense

109,050

196,218

Total other expense

109,050

196,218

Loss before provision for income taxes

(1,200,321)

(1,108,154)

Provision for income taxes

17,251

756

Net loss

$

(1,217,572)

$

(1,108,910)

Basic and diluted loss per share

$

(0.01)

$

(0.01)

Weighted average number of common shares outstanding - basic and diluted

165,424,728

126,269,222

GLYECO, INC. AND SUBSIDIARIESAdjusted Earnings before Interest, Taxes, Depreciation and Amortization (non-GAAP)For the three months ended December 30, 2018 and 2017

Three Months Ended March 31,

2018

2017

GAAP net loss

$

(1,217,572)

$

(1,108,910)

Interest expense

109,050

196,218

Income tax expense

17,251

756

Depreciation and amortization

276,278

245,482

Share-based compensation

119,888

136,986

Adjusted EBITDA

$

(695,105)

$

(529,468)

Presented above is the non-GAAP financial measure representing earnings before interest, taxes, depreciation, amortization and stock compensation (which we refer to as ''Adjusted EBITDA'') and the reconciliations of Adjusted EBITDA to net loss. Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for, net income (loss) and cash flows from operations calculated in accordance with GAAP.

Adjusted EBITDA is used by our management as an additional measure of our Company's performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our Company's financial results that may not be shown solely by period-to-period comparisons of net income (loss) and cash flows from operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to many of our employees in order to evaluate our Company's performance. Further, we believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results and helps investors make comparisons between our company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in net income (loss), as well as trends in those items.